The CEO Magazine is more than a business title; it’s a source of information, inspiration and motivation for the world’s most successful leaders, executives, investors and entrepreneurs. Our content creates conversations, our voice is the one that matters.

The importance of cause-related marketing

For businesses, maximising profit and making a positive contribution to society needn’t be mutually exclusive. One of the most effective ways to achieve both is via cause-related marketing. But don’t be fooled, not all cause-related marketing schemes are created equal.

The importance of cause-related marketing

For businesses, maximising profit and making a positive contribution to society needn’t be mutually exclusive. One of the most effective ways to achieve both is via cause-related marketing. But don’t be fooled, not all cause-related marketing schemes are created equal.

Cause-related marketing is designed to link an organisation to a charity, not-for-profit or cause for mutual benefit. The benefits for all groups involved, including the greater community, are plain to see. The organisation can benefit from improved brand reputation and awareness, increased customer and employee loyalty, potentially increased sales, and often positive media exposure. I could go on.

Meanwhile, the recipient group benefits from financial and sometimes administrative support to continue their important work, as well as increased brand equity, publicity and awareness. Finally, the community benefits, both directly through the activities the recipient group (often a charity or not for profit) can now deliver, and indirectly by supporting a business they feel aligned with.

The practice of cause-related marketing is not a quick fix or sure thing, however. Many businesses fail to avoid common pitfalls that mean the potential benefits for all groups are not realised, and in the worst-case scenario, the business’s reputation is damaged because its efforts are perceived as self-serving or insufficient.

Choosing the right cause

When cause-related marketing works well, people don’t question the relationship. It just makes sense. There’s a clear connection or alignment between what the two organisations do and their values. When I was Chairman of The Good Guys, I founded and oversaw the company’s philanthropic program, and while there were many worthy causes we considered partnering with, there was often a lack of connection between what they did and our business, which meant they weren’t the right partner for us.

This is how we ended up partnering with Jamie Oliver’s Ministry of Food and Orange Sky Laundry, both of which were undeniably important causes in their own right and also highly complementary to our core business offering – kitchen and laundry appliances and white goods. They were a ‘good fit’.

Misalignment between an organisation and a cause is sometimes referred to as ‘Chairman’s Partner Syndrome’. This is sending up the notion that the chairman’s wife/husband has an influence over what cause the Chairman should support, and as a result the organisation ends up associating with groups that have nothing to do with what they do or what they believe in. Cue the mining company inexplicably sponsoring the ballet.

The importance of employee & management buy-in

These partnerships are more common than you would think and tend to be less rewarding for all parties involved, not to mention that potential benefits like employee loyalty for the organisation, are far less likely to occur without input from this incredibly important group. Input from employees in choosing a cause to align with is one of the most effective ways to ensure sustained enthusiasm, commitment and in some cases even ends up attracting proactive contributions from this group, such as volunteering.

In addition to choosing a cause that ‘fits’ with the organisation, critical to a successful cause-related marketing program is commitment from top management. Entry into a partnership is not to be taken lightly, as short-term efforts that peter out result in poor or non-existent results, and waste the time and energies of all involved, including the charity or cause which could better use this time seeking out a committed partner. The nature of the commitment required on the part of the company means buy-in from top management is essential.

The difference between charity & cause-related marketing

Equally important is that those involved at the organisation recognise there are important differences between a genuine cause-related marketing program and old-fashioned charity promotion. Cause-related marketing requires support and co-operation on a number of levels between the two parties, rather than a one-off donation alongside some social media promotion. Short term campaigns are far less likely to result in a positive impact on a company’s reputation and sales, as consumers are smart enough to recognise these programs for what they really are.

Finally, for cause-related marketing to work and for the potential benefits to be realised on both sides, an open and trusting relationship is non-negotiable. The charity or cause must always feel confident that the partner organisation has their best interests at heart and that the relationship is a transparent one.

Yes, there are common pitfalls to be aware of when pursuing cause-related marketing, but when thought and care are applied, cause-related marketing can forge rewarding, long-lasting and meaningful relationships between businesses and groups in the community. And fortunately for me, I have had the great joy of experiencing these very types of relationships many times before.

The CEO Magazine is more than a business title; it’s a source of information, inspiration and motivation for the world’s most successful leaders, executives, investors and entrepreneurs. Our content creates conversations, our voice is the one that matters.